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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: February 22, 2001

FROM: Barry McVay, CPCM

SUBJECT: Executive Order 13202, Preservation of Open Competition and Government Neutrality Towards Government Contractors' Labor Relations on Federal and Federally-Funded Construction Projects

SOURCE: Federal Register; February 22, 2001, Vol. 66, No. 36, page 11225

AGENCIES: The President

ACTION: Issuance of Executive Order

SYNOPSIS: To promote "the economical, nondiscriminatory, and efficient administration and completion of federal and federally funded or assisted construction projects," President George W. Bush ordered on February 17, 2001, that neither the government nor federally-funded construction project "require or prohibit bidders, offerors, contractors, or subcontractors to enter into or adhere to agreements with one or more labor organizations, on the same or other related construction project(s)..." This prohibits the use of so-called "project labor agreements" on such projects.

EDITOR'S NOTE: President Bush also issued two other executive orders that pertain to labor on federal contracts. See today's FEDERAL CONTRACT DISPATCHES "Executive Order 13201, Notification of Employee Rights Concerning Payment of Union Dues or Fees," and "Executive Order 13204, Revocation of Executive Order on Nondisplacement of Qualified Workers Under Certain Contracts."

EFFECTIVE DATE: February 17, 2001.

SUPPLEMENTAL INFORMATION: On October 23, 1992, President George H. W. Bush issued Executive Order 12818 prohibiting the government and federally-funded construction projects ("any contract for the construction, rehabilitation, alteration, conversion, extension, or repair of buildings, highways, or other improvements to real property") from using any contract provisions that required bidders to enter into "project labor agreements" with labor unions that required employees to join a union or pay union dues. On November 23, 1992, Federal Acquisition Circular (FAC) 90-15 implemented Executive Order 12818 by adding Federal Acquisition Regulation (FAR) Subpart 22.5, Open Bidding on Federal Construction Contracts, and a clause at FAR 52.222-5.

On February 1, 1993, President Clinton issued Executive Order 12836 revoking Executive Order 12818 because he thought "project labor agreements" benefited the government and contractors. On March 2, 1993, FAC 90-17 removed FAR Subpart 22.5 and FAR 52.222-5.

Executive Order 13202 revokes the part of Executive Order 12836 that revoked Executive Order 12818 (in other words, President George W. Bush is reinstating his father's Executive Order 12818). Executive Order 13202 also revokes President Clinton's June 5, 1997, memorandum which encouraged federal agencies to consider using project labor agreements on construction contracts greater than $5,000,000.

Executive Order 13202 states that the government or recipients of federal funds may not "(a) require or prohibit bidders, offerors, contractors, or subcontractors to enter into or adhere to agreements with one or more labor organizations, on the same or other related construction project(s); or (b) otherwise discriminate against bidders, offerors, contractors, or subcontractors for becoming or refusing to become or remain signatories or otherwise to adhere to agreements with one or more labor organizations, on the same or other related construction project(s)." However, it does not "prohibit contractors or subcontractors from voluntarily entering into [such] agreements..." (EDITOR'S NOTE: Executive Order 12818 stated that the government or recipients of federal funds could not require compliance with project labor agreements -- the words "or prohibit" were not in Executive Order 12818.)

The executive order also applies to "any executive agency issuing grants, providing financial assistance, or entering into cooperative agreements for construction projects..."

Contracts awarded before the date of the executive order (that is, February 17, 2001) and their subcontracts are not subject to the order. Also, the head of an agency "may exempt a particular project, contract, subcontract, grant, or cooperative agreement from the requirements...of this order, if the agency head finds that special circumstances require an exemption in order to avert an imminent threat to public health or safety or to serve the national security." However, "special circumstances" may not be based on "the possibility or presence of a labor dispute concerning the use of contractors or subcontractors who are nonsignatories to, or otherwise do not adhere to, agreements with one or more labor organizations, or concerning employees on the project who are not members of or affiliated with a labor organization."

If "an awarding authority, a recipient of grants or financial assistance, a party to a cooperative agreement, or a construction manager acting on behalf of the foregoing, performs in a manner contrary to the provisions of...this order, the executive agency awarding the contract, grant, or assistance shall take such action, consistent with law and regulation, as the agency determines may be appropriate."

The executive order directs the FAR Council to "take whatever action is required to amend the Federal Acquisition Regulation in order to implement the provisions of this order" within 60 days of the order -- by April 18, 2001. Also, it directs all agencies to "revoke expeditiously any orders, rules, regulations, guidelines, or policies implementing or enforcing Executive Order 12836 of February 1, 1993, as it relates to project agreements, to the extent consistent with law."

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2001 by Panoptic Enterprises. All Rights Reserved.

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